Use of prepaid cards for slot play worries problem gambling advocates

For years, gaming regulators have created barriers between debit or credit cards and slot machines so that gamblers wouldn't drain their bank accounts or ruin their credit ratings.

While they've allowed automated teller machines at casino properties, regulators have never crossed the line of enabling players to put their cards into a slot machine to access money directly.

But now, a Las Vegas company is proposing a change in state gaming regulations that would allow the use of a prepaid card for slots that puts casinos one step closer to a player's bank account.

The biggest trade-off would be that jackpot winners could be safer when they leave casinos because they wouldn't have wads of cash that would make them vulnerable to robbers and thieves. Still, problem gambling advocates are concerned that any new easy access to funds may also make it easier for compulsive gamblers to try to chase their losses.

In a workshop meeting conducted by the state Gaming Control Board Thursday, Sightline Interactive introduced proposals to amend two gaming regulations that would enable the use of prepaid cards.

Harry Hagerty, president and chief financial officer of Sightline, said the use of cash for retail transactions is shrinking, with one study suggesting that the percentage of cash transactions would fall to 9.8 percent by 2015. That's not the case in a casino where it's estimated that 60 percent of cash wagered is acquired in a casino, either through check cashing or an ATM withdrawal.

Sightline is proposing the use of prepaid cards similar to prepaid gift cards and casino loyalty cards that could be loaded at banks and debited and credited at slot machines. Under the Sightline plan, players using the cards would be required to fill out a one-time registration form at a participating casino with a validated name and street address.

It's virtually the same process that online poker and mobile sports wagering players go through when they sign up for play. Sightline already uses its proprietary system using the Discovery credit card system for Internet gambling in New Jersey.

But there are concerns.

Carol O'Hare, executive director of the Nevada Council on Problem Gambling, testified that she would prefer the system credit players with a guarantee of future access to winnings rather than direct withdrawal to create additional time before a gambler plays again.

Hagerty said there is a built-in wait time for players who lose their money on a prepaid card because it would take time for a player to go to a bank to reload funds from a checking or savings account.

O'Hare also wants a mechanism to enable players to see a problem gambling message before accessing funds.

Gaming Control Board Technology Division Chief Jim Barbee said he's concerned that one of the biggest problems with points earned on casino loyalty cards is player fraud and problems with technological glitches. He fears that would increase with prepaid cards if regulators have to intervene in disputes over cash access.

Members of the Control Board questioned Hagerty about the technology and some of the policy concerns raised; after receiving testimony, Chairman A.G. Burnett said the board at its Feb. 5 meeting would likely send amendments to the Nevada Gaming Commission for consideration.

"I like the restrictive language that's been drafted and I like that fact that we're taking baby steps here," Burnett said. "But I'm not ready to go down the path of being able to purchase prepaid cards at Wal-Mart, but this isn't what that is."

Burnett said under the current timetable, the commission could have its own public hearing and possible adoption of the amended regulations at its Feb. 20 meeting.

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